Apple is giving unprecedented discounts on its iPhones in China, slashing retail prices by up to 500 yuan ($70) amid rising competition pressure in the world’s largest smartphone market.
The US tech behemoth reduced the price of select iPhones by 5%, according to its Chinese website on Monday. The limited-time deal, dubbed a Lunar New Year event, will run from January 18 to January 21 in preparation for the mid-February holiday.
In China, sales of Apple’s current iPhone 15 devices have been much lower than prior versions.
Home-grown competitors like Huawei Technologies and Xiaomi have begun selling competing models, while insiders have said that certain enterprises and government agencies have limited personnel’s use of Apple devices, replicating U.S. government bans on Chinese software for security reasons.
Chinese iPhone sales fell 30% in the first week of 2024 compared to the same time a year ago, according to Jefferies analysts in a client note, after a 3% dip in 2023 overall. Analysts predict the competitive situation to get more difficult this year.
Apple has not reduced pricing for its most recent iPhones in years. The discounts come after the company stunned the market by not increasing pricing for the iPhone 15 series when it launched in September.
Since the start of the year, online shopping portals such as Pinduoduo have reduced the price of the iPhone 15 and iPhone 15 Pro by up to 16%.
The key selling point of Chinese phones is the tremendous value for money that can be had by foregoing the Apple, Samsung, and Sonys of the globe. There are several reasons for this, including cheap labor costs, local production, and the lack of brick-and-mortar storefronts, which naturally reduce expenses. There is also a complete absence of marketing: when was the last time you saw an advertisement for a Xiaomi device on television?
Most importantly, a lower price does not always imply a worse quality product. Chinese phones often include cutting-edge technology and, on occasion, provide new functions. Vivo has the first under-screen fingerprint scanner, while ZTE was the first to incorporate an in-screen selfie camera.
Apple’s India division achieved record-breaking revenue in 2022-2023, with sales up 48% to Rs 49,321 crore and net profit up 76% to Rs 2,229 crore. This is an almost 50% increase from the previous year when sales were $4.03 billion (Rs 33,381 crore).
Apple has a 63% market dominance in India’s premium phone market. Apple’s iPhone active installed base reached a new all-time high in fiscal 2023.
According to reports, Apple has notified its manufacturing partners that it wants to expand its operations outside China. Apple’s biggest supplier, the Taiwan-based Foxconn, has been transferring more of its manufacturing out of China to India.
